Frequently Asked Questions - Colonial Life Insurance Company of Texas

​Why do I need life or disability insurance?

Life insurance is for your peace of mind, so you know your family will be financially protected. A typical policy could cover mortgage payments in the event of a disability, or could pay off the mortgage balance in the event of death.

Why should I choose Colonial Life?

Odds are if you're paying a mortgage, you've received many offers for mortgage protection insurance. Our reputation is built on a rock-solid foundation of more than 35 years of experience. You can count on us to be there for you and your family – today and in the future.

Should both spouses have life insurance coverage?

Insurance does not change the fact that the surviving spouse will play both parenting roles. Life insurance is purchased to help those left behind. You hope you never have to use it, but if something were to happen to you, your family will benefit from having one less concern in an emotional period of their lives.

I don't have dependents; do I still need life insurance?

Even without kids or a spouse, you may have other family members to protect from things like unpaid debts or your funeral costs.

What if we already have mortgage insurance?

It is not uncommon for homeowners to mistakenly think that PMI (private mortgage insurance) will cover their mortgage payments if they become disabled or die. However, this is not the case. If your down payment on your home is less than 20%, your lender will most likely require you to get PMI. PMI is designed to reimburse a mortgage lender if you default on your loan and your house isn't worth enough to entirely repay the debt through a foreclosure sale. PMI has nothing to do with disability, or death and it won't pay your mortgage if one of these things happens to you. PMI is designed to protect the lender, not the homeowner.

Do I need mortgage insurance coverage if I already have coverage from my employer?

Work benefits are great, but they are controlled by your employer and typically end when you leave your job regardless of the reason. With an individually owned policy, your coverage belongs to you as long as you pay the required premiums. It doesn't depend on your employment status, if you move, or if you refinance your mortgage.

Who is the beneficiary of my insurance policy?

Insurance proceeds are paid to the beneficiary you designate.

Will my family pay taxes on my death benefit?

In most cases, the death benefits go to your beneficiaries tax-free.

Couldn't my estate just sell my assets if I die?

Yes, your estate could liquidate your assets, but how much are they worth? The typical mortgage is between $75,000 and $200,000. If your family sold everything you own would they make that much? Mortgage protection insurance could be used to pay off the mortgage loan and cover this potential financial disaster.

Is a medical exam required to apply for coverage?

Some applicants are approved with no medical tests required and some require minimal testing such as a blood check or a urine sample. Testing can be done in the comfort of your home, or wherever is convenient for you. The medical tests that will be required to assess your application will be determined by your age and coverage amount. All related costs are paid by Colonial Life.

If I'm turned down, can my spouse still get coverage?

Absolutely. Insurability and underwriting guidelines are based on each individual applicant and should not affect the other spouse's application for insurance coverage.

Does the mortgage insurance premium increase as the mortgage ages?

Most policy premiums are fixed for the duration of the term and guaranteed not to increase during that period, even if your health changes.

What options are available to pay my insurance premiums?

We offer many payment options and our agents are available to explain them to you in detail. They may include electronic funds transfer, direct pay, or added to your monthly mortgage payment if your mortgage is with Colonial.

When does my insurance coverage become effective?

As soon as the policy is approved if your health stays the same as stated in the application and the first premium is received. Your agent can explain any special conditions that might apply.

Your disability payment may be as large as $2,000 per month. However, your disability payment cannot be greater than your monthly mortgage payment, including the principal and interest and escrow payments such as taxes, homeowner's insurance, etc.

When does mortgage disability insurance coverage terminate?

We have several different types of mortgage disability insurance. Our most popular Single or Joint Mortgage Disability insurance terminates coverage at age 65 or your death. If your spouse is also covered and is younger than 65, the spouse coverage remains in effect until they turn 65 or becomes deceased. All insurance coverage stops if you discontinue premium payments or if you request termination of your policy.

How long are mortgage disability insurance benefits payable?

With the Single or Joint Mortgage Disability policy you choose the benefit period at the time of application. It can be 1 year or 2 years, in addition, some disabilities have a maximum assistance of 6 or 12 months.

Does the policyholder have to be confined at home to be eligible for mortgage disability benefits?

Your doctor's diagnoses and claim statements may be all that is needed to start the benefits.

Can a policyholder apply for mortgage disability benefits more than once during the term of the insurance?

Yes, provided it is a separate disability originating from a different cause. You may also receive payments on a disability of the same cause.

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Can I get mortgage disability insurance coverage even if I have a pre-existing condition?

Yes. Pre-existing conditions not excluded by an amendment to the policy could be covered after 2 years.

Due to policy variations, provisions and limitations please contact one of our representatives for detailed information.​

This is only a summary of policies and riders available, and is not a contract. The policy you decide to purchase forms the contract, and will provide complete details on your benefits. In addition, all policies have a "free look period" during which you can cancel the coverage and your premiums will be refunded. For complete details of available coverages, contact one of our representatives.

Insurance products issued by Colonial Life Insurance Company of Texas are not FDIC/NCUA insured. The insurance products are not issued, guaranteed or underwritten by Colonial, Colonial National Mortgage or the FDIC or NCUA. The insurance products may involve investment risk, if appropriate, including potential loss of principal.